December 15th, 2015

AAON Reports Earnings & Backlog for the Second Quarter of 2020

TULSA, Okla., Aug. 06, 2020 (GLOBE NEWSWIRE) -- TULSA, OK, August 6, 2020 - AAON, INC. (NASDAQ-AAON), today announced its results for the second quarter of 2020.

Financial Highlights:Three Months Ended 
 June 30,
 %   Six Months Ended 
 June 30,
 %
 2020 2019 Change   2020 2019 Change
 (in thousands, except share and per share data)   (in thousands, except share and per share data)
Net sales$125,596  $119,437  5.2%   $263,079  $233,259  12.8%
Gross profit38,131  30,204  26.2%   81,078  55,634  45.7%
Gross profit %30.4% 25.3%     30.8% 23.9%  
Selling, general and admin. expenses$15,939  $12,912  23.4%   $31,153  $26,589  17.2%
SG&A %12.7% 10.8%     11.8% 11.4%  
Net income17,804  13,391  33.0%   39,657   22,148  79.1%
Net income %14.2% 11.2%     15.1% 9.5%  
Earnings per diluted share$0.34  $0.25  36.0%   $0.75  $0.42  78.6%
Diluted average shares52,750,401  52,747,199  —  %   52,885,491  52,589,845  0.6%
              
 June 30, December 31,%        
 2020 2019 Change        
 (in thousands)          
Backlog$103,508  $142,747  (27.5)%        
Cash & cash equivalents & restricted cash70,845  44,373  59.7%        
Total current liabilities76,620  56,028  36.8%        

Gary Fields, CEO, said "It has been a challenging quarter for us.  As an essential business, we were able to maintain continuous operations during the quarter but our workforce was impacted by employee absences, most significantly in the latter part of June.  These unexpected employee absences resulted in reduced shipments and longer lead times.  Our dedicated team members worked hard to overcome the challenges as demonstrated by our positive results reflected above.  Our improved efficiency, fiscal responsibility and declining raw material costs helped us improve our gross profit and bottom line."

Mr. Fields continued, "Thankfully, most of our workforce affected by COVID-19 has recovered and returned to work, resulting in significant improvement in our employee absenteeism levels in the first part of July.  We continuously work to keep our workforce safe and healthy.  We have implemented several safety procedures concerning COVID-19 including mandatory use of masks, daily temperature scanning and health screens of all employees and visitors at our facilities."

Mr. Fields added "Our financial condition remains strong as evidenced by our current ratio of 2.9:1 at June 30, 2020.   We had unrestricted cash and cash equivalents of $61.3 million as of June 30, 2020, which, along with improved free cash flow, enabled us to declare an $0.19 per share semi-annual cash dividend, paid on July 1, 2020, an 18.8% increase from the $0.16 semi-annual dividend paid last year.  Our capital expenditures during the first half of the year were $33.5 million, as compared to $16.8 million for the same period a year ago, and we anticipate our full-year 2020 capital expenditures will total approximately $73.2 million."

Mr. Fields concluded, "Our incoming order rate has recently softened slightly due to less than optimal lead times and turmoil in the market resulting from COVID-19.  We are back on schedule and anticipate orders will increase as our lead times improve during our peak selling season.  Uncertainty in the education industry could negatively impact our employee attendance levels as well as our bookings.  The outlook for the remainder of the year is hard to predict during these uncertain times.  Despite this uncertainty, we remain cautiously optimistic that the year will end with modest revenue growth over 2019."

The Company will host a conference call today at 4:15 P.M. (Eastern Time) to discuss the second quarter 2020 results. To participate, call 1-833-634-8218 (code 9699424); or, for rebroadcast available through August 20, 2020, call 1-855-859-2056 (code 9699424).

About AAON
AAON, Inc. is engaged in the engineering, manufacturing, marketing and sale of air conditioning and heating equipment consisting of standard, semi-custom and custom rooftop units, chillers, packaged outdoor mechanical rooms, air handling units, makeup air units, energy recovery units, condensing units, geothermal/water-source heat pumps, coils and controls. Since the founding of AAON in 1988, AAON has maintained a commitment to design, develop, manufacture and deliver heating and cooling products to perform beyond all expectations and demonstrate the value of AAON to our customers. For more information, please visit www.AAON.com.

Forward-Looking Statements
Certain statements in this news release may be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933. Statements regarding future prospects and developments are based upon current expectations and involve certain risks and uncertainties, including risks related to the impact of the error correction, that could cause actual results and developments to differ materially from the forward-looking statements.

Contact Information
Jerry R. Levine
Phone: (914) 244-0292
Fax: (914) 244-0295
Email: jrladvisor@yahoo.com


AAON, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
 Three Months Ended 
 June 30,
 Six Months Ended 
 June 30,
 2020 2019 2020 2019
 (in thousands, except share and per share data)
Net sales$125,596  $119,437  $263,079   $233,259  
Cost of sales87,465  89,233  182,001   177,625  
Gross profit38,131  30,204  81,078   55,634  
Selling, general and administrative expenses15,939  12,912  31,153   26,589  
Loss (gain) on disposal of assets—   6  (62)  290  
Income from operations22,192  17,286  49,987   28,755  
Interest income, net19  31  80   40  
Other income (expense), net32  17  5   (9) 
Income before taxes22,243  17,334  50,072   28,786  
Income tax provision4,439  3,943  10,415   6,638  
Net income$17,804  $13,391  $39,657   $22,148  
Earnings per share:       
Basic$0.34  $0.26  $0.76   $0.43  
Diluted$0.34  $0.25  $0.75   $0.42  
Cash dividends declared per common share:$0.19  $0.16  $0.19   $0.16  
Weighted average shares outstanding:       
Basic52,099,694  52,120,272  52,160,348   52,087,626  
Diluted52,750,401  52,747,199  52,885,491   52,589,845  



AAON, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
 June 30, 2020 December 31, 2019
Assets(in thousands, except share and per share data)
Current assets:   
Cash and cash equivalents$61,284   $26,797  
Restricted cash9,561   17,576  
Accounts receivable, net56,394   67,399  
Income tax receivable5,154   772  
Note receivable28   29  
Inventories, net85,411   73,601  
Prepaid expenses and other1,943   1,375  
Total current assets219,775   187,549  
Property, plant and equipment:   
Land3,804   3,274  
Buildings112,735   101,113  
Machinery and equipment260,548   236,087  
Furniture and fixtures17,926   16,862  
Total property, plant and equipment395,013   357,336  
Less: Accumulated depreciation190,585   179,242  
Property, plant and equipment, net204,428   178,094  
Intangible assets, net155   272  
Goodwill3,229   3,229  
Right of use assets1,665   1,683  
Note receivable555   597  
Total assets$429,807   $371,424  
    
Liabilities and Stockholders' Equity   
Current liabilities:   
Revolving credit facility$—   $—  
Accounts payable19,698   11,759  
Dividends payable9,930   —  
Accrued liabilities46,992   44,269  
Total current liabilities76,620   56,028  
Deferred tax liabilities20,358   15,297  
Other long-term liabilities3,794   3,639  
New market tax credit obligation6,340   6,320  
Commitments and contingencies   
Stockholders' equity:   
Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued—   —  
Common stock, $.004 par value, 100,000,000 shares authorized, 52,234,119 and 52,078,515 issued and outstanding at June 30, 2020 and December 31, 2019, respectively209   208  
Additional paid-in capital6,451   3,631  
Retained earnings316,035   286,301  
Total stockholders' equity322,695   290,140  
Total liabilities and stockholders' equity$429,807   $371,424  




AAON, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
 Six Months Ended 
 June 30,
 2020 2019
Operating Activities(in thousands)
Net income$39,657   $22,148  
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization12,340   11,760  
Amortization of debt issuance cost20   —   
Provision for losses on accounts receivable, net of adjustments76   128  
Provision for excess and obsolete inventories(193)  1,153  
Share-based compensation5,694   7,786  
(Gain) loss on disposition of assets(62)  290  
Foreign currency transaction loss (gain)30   (13) 
Interest income on note receivable(12)  (26) 
Deferred income taxes5,061   3,318  
Changes in assets and liabilities:   
Accounts receivable10,929   (14,983) 
Income taxes(4,382)  2,925  
Inventories(11,617)  (585) 
Prepaid expenses and other(568)  (650) 
Accounts payable2,893   (2,592) 
Deferred revenue473   172  
Accrued liabilities2,423   5,041  
Net cash provided by operating activities62,762   35,872  
Investing Activities   
Capital expenditures(33,510)  (16,784) 
Proceeds from sale of property, plant and equipment61   59  
Investment in certificates of deposits—    (6,000) 
Maturities of certificates of deposits—    2,000  
Principal payments from note receivable25   28  
Net cash used in investing activities(33,424)  (20,697) 
Financing Activities   
Stock options exercised14,173   7,685  
Repurchase of stock(15,937)  (10,191) 
Employee taxes paid by withholding shares(1,102)  (980) 
Net cash used in financing activities(2,866)  (3,486) 
Net increase in cash, cash equivalents and restricted cash26,472   11,689  
Cash, cash equivalents and restricted cash, beginning of period44,373   1,994  
Cash, cash equivalents and restricted cash, end of period$70,845   $13,683  

 

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